Huge production increase in 2012

“Total 2012 U.S. peanut production is pegged at 3.37 million tons, an 84 percent increase and better than the previous record of 2.58 million tons set in 2008,” he said. “The (National Agricultural Statistics Service) estimate for the U.S. average yield is also a record at 4,192 pounds per acre. This breaks the 2008 record yield of 3,426 pounds per acre.”

U.S. growers increased planted acres by 43 percent to 1.64 million acres last year. Smith predicts this year’s acreage will move to between 1.1 and 1.2 million acres.

“Assuming a 24 percent decrease in planted acres to 1.25 million and a normal abandonment rate, growers would produce a 2.2 million ton crop at 3,520 pound expected yield,” he said.

Domestic and international peanut demand rising

“Peanut and peanut butter prices at the retail level rose to slow demand and as a result domestic consumption dropped 1.2 percent (in 2012). The actual loss in consumption is higher because of lost growth in domestic use,” Smith said.

This year’s expected high feed prices will keep meat prices high and cause many households to turn to peanut butter as a good substitute of protein, he said.

“Growth in domestic food use should rebound,” Smith said. “USDA currently projects a 7 percent rate of increase, but it could be closer to 9 percent or more by the summer.”

The domestic demand for peanut oil is much greater than the supply. The number of peanuts crushed for oil will rise in 2013 mainly due to the record large 2012 production, Smith said.

He forecasts 370,000 tons of peanut crush, a by-product of peanut production where non-edible grades are crushed to produce peanut oil and meal. Peanut seed and residual are also projected to increase nearly 25 percent to 300,000 tons.

“Acreage will decrease but residual use will more than offset the loss in seed supply,” he said.

Total exports are expected to jump to 500,000 tons, Smith said, and will be instrumental in decreasing the surplus. Exports are projected to have the largest increase — 85 percent over last year.

Adding up the major categories, USDA projects the total consumption of peanuts for the 2012-13 marketing year to be 2.59 million tons. If realized this would be a total increase of 7 percent.

Shelling plants should be busy shelling the 2012 crop and will not be finished at the end of 2013. The peak of peanut harvest is typically mid-October.

“The excellent yields of 2012 will be fresh on farmers’ minds, but they should not assume a repeat will occur in 2013,” Smith said.